THE PRESIDENT: Thanks for the warm welcome. I needed that uplifting
applause because I just finished eating lunch at Sam's. (Laughter.) Had
just a little too much chicken. (Laughter.) But I'm honored to be with
you. It's great to be back in New Albany. This is a fantastic hall. It
is really special. I know you all are proud of it. I appreciate the great
history of this part of the world. I appreciate the fact you got great
people -- and great basketball. (Laughter and applause.)

It's also a good place to do business. And I thank One Southern Indiana
for your efforts to strengthen the spirit of enterprise. I appreciate what
you do. Your members create jobs, attract investment, and add to the
vitality of this region and our country. People here know that customers
should be treated respectfully, money should be spent carefully, and new
taxes should be opposed strenuously. (Applause.)

And that's what I want to talk about today. Kerry, thanks for giving me a
chance to come by. I appreciate it. I'm sorry my wife is not with me --
so are most people, when I travel -- (laughter.) She's doing great. She
sends all her best.

I'm proud to be traveling today with Congressman Baron Hill. Congressman,
thanks for coming. Good to see you, sir. (Applause.) He was reminding me
of the days he was a point guard. He said, just don't remind them here in
New Albany that I used to tear them up, so I won't. (Laughter.)

I want to thank the Lieutenant Governor of the great state of Indiana,
Becky Skillman, for joining us today. Governor, appreciate you coming.
(Applause.) The Mayor, James Garner, has joined us from New Albany. Mr.
Mayor, I appreciate you coming. Thanks for being here. (Applause.) Mayor
Rob Waiz of Jeffersonville is with us today. Proud you'd be here, Mayor.
(Applause.) I thank Mayor-elect Greg Ballard, of the city of Indianapolis,
that has joined us here. Mr. Mayor, thanks for coming. (Applause.) We've
got other state and local officials. Former Congressmen Mike Sodrel and
Keta are with us today. Glad you're here. (Applause.)

And I thank you for letting me come by to share some thoughts about what's
happening in Washington. It's an important time for our economy. In
October, America created 166,000 new jobs. We now have had 50 straight
months of job growth - the longest period of uninterrupted job growth on
record. Since August of 2003, American businesses -- American small
businesses and large businesses, American entrepreneurs and dreamers and
doers have created more than 8.3 million new jobs. The national
unemployment rate is a low 4.7 percent. Here in Indiana, the unemployment
rate is even lower -- 4.5 percent. Thanks to America's workers and
entrepreneurs, our economy grew at a vigorous rate of 3.9 percent in the
third quarter. This economic vitality, this economic growth is lifting our
federal tax revenues -- and that's driving down the deficit. The deficit
today is at 1.2 percent of GDP. And that's low.

At the same time, this economy has got some strains, and you know it as
well as I do: High oil prices, the housing market is challenged, the
financial markets have got uncertainty. Families are working hard to meet
rising mortgage payments, and college and health expenses, and the cost at
the gas pump.

These are serious challenges. But as we have seen in recent years, this
economy of ours is resilient. And that's important for the American people
to understand. Sure, there's some challenges facing us, but the
underpinnings of our economy are strong, and we're a resilient economy.

Just a few weeks after the terrorist attacks of September the 11th, 2001,
our economy was growing. Think about that. After the worst attack on
American soil, where nearly 3,000 of our citizens died, this economy
recovered. That's a resilient economy. After Katrina -- two quarters
after the devastation of Katrina, our economy grew at a powerful rate of
4.8 percent. Despite the ongoing costs and uncertainty of war, the budget
deficit is low. And the reason is clear: This economy is flexible, it is
dynamic, and it is competitive enough to overcome any challenge we face.
And the responsibility of Washington -- in Washington, of people in
Washington, is to keep it that way. And that's what I want to talk about
with you today.

One of the keys to meeting economic challenges is wise policy from your
federal government. Wise policy helps keep us resilient; lousy policy will
hurt the ability for this economy to grow. The decisions we make in
Washington have a direct impact on the people in our country, obviously.

As we debate the decisions, you got to understand there are two very
different philosophies being played out. My philosophy is that the
American people know how to spend their money better than the government
can. That's the core of my philosophy, that I'd rather you have more of
your own money to spend, safe and invest as you see fit. Every time the
government collects a dollar in taxes, it means you have a dollar less to
invest in your business, or to spend on your family, or to put aside for
the future. Government has certain responsibilities, such as protecting
our citizens -- and we're going to meet those responsibilities. But we
must always remember that your paycheck belongs to you -- and that economy
thrives the more money you have in your pocket.

The philosophy has been the centerpiece of my economic policy since I've
been honored to be your President. Since I took office, we've cut taxes
for every American who pays income taxes. We've worked to restrain
spending, while ensuring that we have the resources necessary to protect
the homeland and to make sure our military has what it needs to do the job.
We set a goal to balance the budget by 2012, and we're on pace to meet
that goal.

Now, there's a different philosophy in Washington. I'm not saying these
aren't good people; they are. They just have a different point of view.
Instead of trusting in the judgment of the people, they trust in the
judgment of the federal government. They believe in a federal solution to
every problem -- and somehow, that solution always seems to include raising
your taxes.

Congress now sitting in Washington holds this philosophy. The majority was
elected on a pledge of fiscal responsibility, but so far it's acting like a
teenager with a new credit card. This year alone, the leadership in
Congress has proposed to spend $22 billion more than my budget provides.
Now, some of them claim that's not really much of a difference -- the scary
part is they seem to mean it. Over five years, their proposed spending
spree adds up to an extra $205 billion. Put another way, that's about
$1,300 in higher spending every second, of every minute, of every hour, of
every day, of every year for the next five years.

Think about what it means for you. If you're driving a half hour to visit
your grandparents, Congress would have spent an extra $2.3 million. If you
attend church for an hour, Congress will tally another $4.7 million. If
you watch a football game, Congress would rack up $14 million
-- unless, of course, it goes into overtime. (Laughter.)

It's easy for politicians to claim that this spending won't have much of an
impact on you. But you got to understand that when the bill for all that
spending comes due, Congress is going to turn to the working people, to the
small business owners and the entrepreneurs.

The conclusion does not require an active imagination. All you have to do
is look at the record. For example, leaders in the majority recently
proposed raising taxes on millions of working Americans by increasing the
tobacco tax. It can be tempting to view this as a one-time action aimed at
an unpopular product; that's not the way things work in Washington.
Raising taxes is habit-forming -- once you start in one area, it's hard to
stop in others. In fact, in addition to the tobacco tax proposal, Congress
has proposed to raise taxes on oil and natural gas, on dividends and
capital gains, and stock and bond transactions.

If that's not enough, Congress's budget also allows the tax relief we
delivered to be taken away. Here's what that would mean for the average
taxpayer: If you have children, your taxes would rise $500 per child. If
you have a family of four making $60,000 a year, your taxes would be more
than $1,800 higher. If you're a small business owner, your taxes would
increase almost $4,000.

And they're not picky about how to raise taxes. To them, every bill on the
floor is an opportunity for a tax hike. Congress has proposed tax
increases in the farm bill, the energy bill, the small business bill, and
the children's health bill. If you find a bill that doesn't have a tax
increase, just wait a while -- they'll put one in there.

The price of these tax increases would not be paid in the halls of Congress
-- it would be paid in living rooms and shop floors and office buildings
across America. Higher taxes would mean that you'd put in longer hours to
bring home the same amount of money, which would lead to more time at work
and less time with our families. Higher taxes would mean paying more to
meet the priorities of the Washington politicians, and less to meet the
priorities of your family. And higher taxes would mean fewer opportunities
for entrepreneurs, a tougher time for workers trying to get ahead, and a
greater likelihood of a slowdown across our economy.

People -- the American people understand the cost of tax-and-spend
policies. We had some interesting results at the ballot box last week. In
the state of Oregon, voters rejected the plan to raise tobacco taxes to
further enlarge a government health program. In other words, when the
voters were given a chance, they voted such a plan down in the state of
Oregon. Right here in Indiana, voters in your capital voted for Greg
Ballard and ousted an incumbent mayor, in large part because the incumbent
mayor supported raising taxes. A newspaper report explained that the
winning candidate, quote, "rode a wave of voter discontent over tax
increases" to a stunning upset.

We need to make sure the message is heard in the Nation's Capital -- and
I've come to New Albany, Indiana, to let you know I'm going to do my part.
(Applause.) Under the Constitution, the President has the power to veto
bills he thinks are unwise. And with all the other pressures on our
economy, raising taxes is one of the most unwise things Congress could
possibly do. I hope the leaders in Congress will cooperate and send me
reasonable spending bills that I can sign. But if they insist on trying to
raise taxes on the American people, I will not hesitate to use my veto pen
to stop them. (Applause.)

For all their plans to increase federal spending, you would think that the
leaders in Congress would be in a hurry to get the government's annual
spending bills to my desk. That's not the case. It took until last week
for Congress to send me the first of these spending bills. This was the
latest date in 20 years that Congress has sent its first annual
appropriations bill to the President's desk. I know they wanted to be
remembered by history, but I don't think that's what they had in mind.

As of this morning, Congress has sent me only two annual appropriations
bills. One is the spending bill for the Defense Department. This isn't a
perfect bill; it includes some unnecessary spending. But this morning in
the Oval Office I signed that bill to make sure our military has the full
support of the federal government. (Applause.)

The other spending bill is for the Departments of Labor, Health and Human
Services, and Education. This bill is 44 days late and nearly $10 billion
over budget, and filled with more than 2,000 earmarks. Some of its
wasteful projects include a prison museum, a sailing school taught aboard a
catamaran, and a "Portuguese as a second language" program. Congress owes
the taxpayers much better than this effort. And so today in the Oval
Office I vetoed this bill. (Applause.) Congress needs to cut out that
pork, reduce the spending, and send me a responsible measure that I can
sign into law.

While Congress was passing the bloated Labor and Health spending bill, it
delayed action on a good bill for the Department of Veterans Affairs. The
bill includes vital funds for veterans' benefits and care for our wounded
warriors. It had almost unanimous support. The House passed the bill 409
to 2 in June, and the Senate passed it 92 to 1 in September. I urged
Congress to show its commitment to our veterans by sending me this bill by
Veterans Day. Well, they didn't listen. Our veterans have already waited
longer than they should have to. At the very least, Congress should send
me a clean veterans bill before leaving for its two-week Thanksgiving
vacation. (Applause.)

Another priority that Congress has failed to meet is energy. Leaders of
both parties understand that America's dependence on oil creates problems
for our economy, and our environment, and our national security. When they
were elected last November, majority leaders in Congress promised to pass
an energy bill to reduce our dependence on oil. I consulted with members
of both parties -- and in my State of the Union address, I proposed a plan
to reduce America's gasoline consumption by 20 percent over 10 years. I
call this plan 20-in-10, and asked Congress to pass it by beginning of the
summer driving season.

Now the summer driving season is over; the price of oil has jumped to
nearly $100 a barrel, and Congress has not acted. America clearly needs
legislation that expands the use of ethanol and biodiesel, promotes energy
conservation, invests in advanced technologies like clean coal and nuclear
power. Listen, breaking our reliance on oil and gas is not going to happen
overnight.

Congress should also authorize environmentally responsible oil exploration
offshore and in the Arctic National Wildlife Refuge. American consumers
and businesses are looking to Washington for action on this issue. And
Congress needs to pass a bill that encourages the development of more
energy, that makes us less dependent on foreign sources of oil, and they
need to do it now. (Applause.)

Congress is grappling with another difficult issue -- it's called the
Alternative Minimum Tax. Decades ago, this section of the tax code was
designed to ensure that the wealthy pay their fair share of taxes -- but
its provisions are not adjusted for inflation. As a result, it's become
increasingly likely that middle class taxpayers will be subject to the AMT.
This would come as an unpleasant surprise to many American families, who
would be forced to calculate their income taxes twice -- and then pay the
government the higher amount.

In recent years, Congress has passed a temporary "patch" that prevents most
middle class taxpayers from having to pay the AMT. But this year, Congress
has not done so. With no relief in place, 25 million taxpayers would be
subject to the Alternative Minimum Tax. On average, they would have to
send an extra $2,000 to the IRS -- which is a huge tax increase that they
do not expect and do not deserve.

Some in Congress have looked at this impending tax burden and used it as an
opportunity to raise taxes. Last week, the House passed a bill that
provides relief for AMT, but raises taxes on others. Preventing a tax
increase in one area should not be an excuse for raising taxes in other
areas. Congress should eliminate the tax increases in the bill, and send
the AMT relief to my desk as soon as possible. That's what the American
taxpayer expects. (Applause.)

The timing of congressional action on AMT relief is critical. I want to
spend a little time explaining why. The longer Congress waits, the more
difficult it will be to print and distribute tax forms on time. Last
month, Treasury Secretary Paulson wrote a letter that said this: "To avoid
confusion and delays for taxpayers, it is critical that an AMT patch be
enacted by early November." Well, early November has come and gone, and
Congress has not acted. If Congress does not act before Thanksgiving, $75
billion worth of tax refund checks could be delayed.

Yet when the Senate Majority Leader was asked if he would pass an AMT patch
before Thanksgiving, he said, "No." Well, that's not a good enough answer
for the American taxpayer. Congress needs to protect the middle class from
an unfair tax hike. They need to finish their business quickly; they need
to make sure those who get their refunds get them on time.

When it comes to taxes and spending, they don't have a very good record,
but here's a good way to start, is to make sure that Congress passes the
war supplemental funds we need to give our troops the very best equipment
possible in the theaters of Afghanistan and Iraq. (Applause.)

I think it's important for members of Congress to hear the words of Deputy
Secretary of Defense Gordon England, when he wrote them why the funds, the
supplemental funds to support the war effort -- see, these are funds
separate from the defense bill; these are funds specifically to support our
troops in harm's way, and other measures. And here's what he wrote: He
said delaying could have this kind of quote -- in other words, what
Congress is trying to do -- some in Congress are trying to delay spending
this money. Some of them in Congress want to say we're going to spend some
of the money, and by the way, tell you how to conduct the war. That's not
going to work. We don't need members of Congress telling our military
commanders what to do. We need our military commanders telling us what to
do so we can win the war against these extremists and radicals.
(Applause.)

See, I think it's important to get the advice from the military. I don't
want our kids in uniform to think that the President is playing politics
with their lives. I want those in the battle to understand that I'll be
making decisions based upon the considered judgment of our military
commanders. If you've got somebody in harm's way, you want the President
being -- making advice, not -- be given advice by the military, and not
making decisions based upon the latest Gallup poll or focus group.
(Applause.)

And so they're delaying the money that needs -- our troops need to have.
And here's what the Deputy Secretary said. He said, it would have "a
profoundly negative impact on the defense civilian workforce, depot
maintenance, base operations, and training activities." In other words,
there's a consequence for not funding this money.

Congress's responsibility is clear: It should not go home for the
Christmas holidays without giving our troops on the front line the funds
they need to succeed. Now, look, I understand some of them in Congress
didn't agree with my decision -- and that's fine. I can understand that.
That's what that democracy is all about. Nobody likes war; I understand
that. And I understand some were critical of the decision I made, and
that's okay. But whatever their position on the war is, we should be able
to agree that our troops deserve the full support of those of us in
Washington, D.C. (Applause.)

By the way, look at these folks in uniform -- I just got to -- I just got
to tell you, I'm incredibly proud to be the Commander-in-Chief of such
amazing citizens who volunteer to serve our country in the face of danger.
What a remarkable country we have to have citizens such as these.
(Applause.)

It's important for Congress to get their spending bills done. See, the
strategy may be to put them all in one big bill, kind of delay and delay
and delay, and then send it all in one big package, and no telling what's
going to be in there. The best way to get the business done -- the
people's business done is to pass these appropriations bills one at a time
and get them to my desk in a expeditious way. Unfortunately, the number
two leader in the Senate, Democrat leader said this: "I don't think it's
physically possible for us to do all the bills individually." That's,
frankly, not good enough for the American people. (Applause.)

So, obviously I had something on my mind. And I thank you for giving me a
chance to come and share it with you. It's a critical time. I have great
respect for the process, and I've got respect for people in Washington,
D.C. But they're coming at you with new taxes, and I'm going to do
everything in my power to stop them. We don't need to raise the taxes on
the working people; we don't need to raise the taxes on our farmers and
ranchers; we don't need to raise taxes on the small business owners. What
we need to do is set clear priorities with the people's money -- which is
defend this homeland, support our troops, and make sure we reduce the
deficit, and keep this economy growing strong.

As I mentioned earlier in the speech, there's some uncertainty in the
economy. But we have dealt with that before, and we can continue to deal
with it, particularly if we keep the taxes low.

I'm honored to be back in southern Indiana. It's a thrill to be with you.
Thank you for your hospitality. Thank you for being -- loving your
country. God bless you all. God bless America. (Applause.)